POLICY & REGULATION COMMERCIAL Sterilization troubles ...

FROM THE EDITORS OF: THE GRAY SHEET, CLINICA, START-UP AND MEDTECH INSIGHT NEWSLETTER

April 22, 2019

Pharma IntelligenceInformaInsight

Medtech Issue 140

medtech.pharmaintelligence.informa.com

R&D

98% of burns healed in Avita Medical's Recell trial, p. 11

POLICY & REGULATION

Sterilization troubles leads to shortage of pediatric air tubes, p. 5

COMMERCIAL

Paris-based EOS imaging shows off its many layers, p. 8

How A Team Led By Medtronic Quality Experts Plans To Stand Up To 'A Monster Called CAPA' – And Make It 'Cool'SHAWN M. SCHMITT [email protected]

W hen Medtronic PLC officials looked across the company to determine what they call the

firm's "cost of poor execution," they made a shocking discovery: the device giant was spending upwards of $150m to conduct corrective and preventive action (CAPA) activities at its various manufacturing sites.

Under its "cost of poor execution" ini-tiative, Medtronic calculates "the dollars associated with poor-quality things that happen," said Luann Pendy, senior VP of global quality for the firm.

Poor execution can take the form of scrap, rework, form FDA-483 inspectional observations or recalls, just to name a few.

"At our company, we spend hundreds of millions of dollars addressing the cost of poor execution. So, when we started measuring it, it opened the eyes of all of the people in the business as to how much money we're spending on poor execution," Pendy said. The "scrap, 483s, field corrective actions – they all go into one basket, and then what happens next is we write a CAPA.

"It's about $150m that we spend on CAPA, but that's an activity-based num-ber," she added. That figure is based on "the number of CAPAs that are written

and the amount of time it takes to address a CAPA. It does not incorporate things like validation work and the cost of the valida-tion product that we have to do as part of the CAPA. It's simply the number times the hours spent on it: $150m.

"That's a thousand people across the company – and that's probably a low-ball number, by the way – who are in-volved in CAPA."

That's when Pendy began a quest to re-think the CAPA process. She worked with the US FDA and the Medical Device Innova-tion Consortium through its joint Case for Quality to devise a so-called "#makeCAPA-cool" initiative to recast corrective and pre-ventive action as a continuous learning tool, rather than a place where problems often go to linger, be ignored and never die.

CONTINUED ON PAGE 22

"Industry and FDA have created a monster. We have

created a monster called 'CAPA,' and we have to figure out a way

to reduce that monster." – Luann Pendy

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medtech.pharmaintelligence.informa.com April 22, 2019 | Medtech Insight | 3

inside: Cover / How A Team Led By Medtronic Quality Experts Plans

To Stand Up To "A Monster Called CAPA" – And Make It "Cool" – The so-called "#makeCAPAcool" group wants to recast corrective and preventive action as a continuous learning tool, rather than a place where problems often go to linger, be ignored and never die.

EDITORS' PICKS 5 There's A Pediatric Air-Tube Shortage Because A

Sterilization Facility Was Shut Down – After an Illinois sterilization facility was shut down earlier this year, the US FDA says it has resulted in a temporary shortage of Bivona emergency breathing devices for children.

6 All 'Bye' Itself: Alcon Spins Out From Novartis In $25Bn Stock Listing – The eye-care device business officially listed on the SIX Stock Exchange on April 9 with a total market capitalization of around $28bn, making it Switzerland's biggest stock deal in a decade.

6 Brexit Delay Gives EU27 Yet More Time To Grow Number Of EU-Compliant Devices – Has the European Commission done enough to allow UK-certified medical devices to continue on the EU27 market in the event of the UK dropping out of the EU without a deal?

7 Device Tax-Repeal Bill Introduced In House With 227 Co-Sponsors – US House Representatives Ron Kind and Jackie Walorski have introduced a permanent medical device tax-repeal bill, alongside 225 co-sponsors from both parties.

COMMERCIAL 8 The Many Layers Of EOS Imaging – Surgical Planning,

Low-Dose Imaging, 3D Services – Medtech Insight looks at EOS imaging's marketing plans, as well as its other services and products, including its core product: a low-dose, full-body and stereo-radiographic imaging system.

10 Zimmer Biomet Enters Partnership To Improve Outcomes For Patients With Fragile Hip Fractures – The firm has entered into a partnership with the nonprofit European Pathway Association.

explore more:exclusive online contentFDA yanks mesh from markethttps://bit.ly/2ZjYtZm

Transvaginal mesh products made by Boston Scientific and Coloplast were ordered pulled from US shelves by the agency on Aug. 16. Under the rare FDA order, the two firms must immediately stop selling the mesh and have 10 days to submit plans to the agency outlining how they will recall their unimplanted devices.

SOPHiA gains CE markhttp://bit.ly/2UjVyfz

SOPHiA GENETICS has scored a CE-IVD mark for its molecular diagnostic device, Solid Tumor Solution. The diagnostic application detects and characterizes genomic alterations in 42 clinically relevant genes associated with a range of tumors.

Knock, knock – WHO's therehttps://bit.ly/2vaNAeN

The World Health Organization has framed a policy to help suppliers, donors, procurers and distributors manage medical products throughout the supply chain and ensure availability within their remaining shelf-life.

Intact’s Tack dissection stopperhttp://bit.ly/2ZcriqV

The approval of Intact's peripheral artery dissection repair device is based on results from its 213-patient TOBA II trial, which showed Tack resolved 92.1% of dissections in peripheral arteries following balloon angioplasty.

Device Weekhttps://bit.ly/2y4lpgk

In this week's Medtech Insight podcast, Shawn M. Schmitt explains why the FDA ordered transvaginal mesh products removed from the US market, and Ferdous Al-Faruque highlights a growing device-shortage issue linked to problems at two US sterilization

medtech.pharmaintelligence.informa.com

8 5 6


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4 | Medtech Insight | April 22, 2019 © Informa UK Ltd 2019

Medtech insightSHAWN M. SCHMITT @[email protected]

REED MILLER @[email protected]

AMANDA MAXWELL @MEDTECHAMANDA [email protected]

MARION WEBB @[email protected]

SUE DARCEY @MEDTECH_INSIGHT [email protected]

FERDOUS AL-FARUQUE @[email protected]

ELIZABETH ORR @[email protected]

CATHERINE LONGWORTH @[email protected]

ASHLEY YEO @[email protected]

MAUREEN KENNY @[email protected]

NEENA BRIZMOHUN @[email protected]

VIBHA SHARMA @[email protected]

ANDREA CHARLES CUSTOM [email protected]

JANET HANIAK SENIOR DESIGNER

GAYLE REMBOLD FURBERT DESIGN SUPERVISOR

RICHARD FAINT HEAD OF [email protected]

PHIL JARVIS MANAGING DIRECTOR

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10 US FTC Approves Fresenius And NxStage Merger – The US Federal Trade Commission has finally approved Fresenius' $2bn acquisition of NxStage Medical.

R&D 11 Avita’s Recell Heals 98% Of Burns In Pediatric Trial –

The Recell system of Spray-On Skin Cells combined with mesh autografts healed 98% of burns within four weeks.

12 SPR's Peripheral Nerve Stimulator Relieves Post-Amputation Pain – SPR Therapeutics' Sprint percutaneous peripheral nerve stimulator proved safe and effective at reducing pain in post-amputation patients in a new 28-patient randomized study.

POLICY & REGULATION 13 "Major" Pain For FDA: Under OMB Directive, Congress

Will Vote On So-Called "Major" Rules, Guidance Docs – New regulations and guidance documents from the US FDA will soon have to undergo scrutiny from the Office of Management and Budget.

14 German Industry Is Winning Medtech Aids Quality Battle, If Slowly – The price versus quality standoff surrounding the supply of medtech aids and assistive-care products prescribed in the German primary- and ambulatory-care settings goes on.

15 If You Build It, They Will Come: FDAer Says Pre-Cert Program Getting Global Attention, AI Paper Just the Start – The US agency’s top digital health officer talks about global curiosity about FDA's precertification program.

17 The Legal Gap Allowing Competitors To Exploit Eudamed – Vincenzo Salvatore of international law firm BonelliErede highlights how the legal gap around the further utilization of data may be detrimental to some and advantageous to others.

18 Device Firms Would Have To Report Value Of Device Samples For Patient Use Under STAR Act – An amendment to the Physician Payment Sunshine Act would require device firms to report the value of any samples given to physicians.

20 Industry Gets Extra Month For 510(k) Revamp Comments – The US FDA has extended the comment period on proposed changes to the 510(k) process until May 22.

20 BD Has Paid Enough In False-Ad Suit, Appeals Court Says – Becton Dickinson won’t need to pay more to resolve a long-running false-advertising case, a federal appeals court has ruled.

21 EU MDR: Any Surprises In The European Commission Notified Body Database? – A look at the number of notified bodies designated under the new EU Medical Device and IVD Regulations.


� E D I T O R S ’ P I C K S �

There's A Pediatric Air-Tube Shortage Because A Sterilization Facility Was Shut DownFERDOUS AL-FARUQUE [email protected]

T he US FDA says the closing of a medical device sterilization facility in Illinois has led to a shortage of tra-

cheotomy devices made for children. The agency is working with the manufacturer, Smiths Medical, to ensure the devices are back on the market as soon as possible.

The agency recently warned device-makers about possible downstream de-vices shortages after two major ethylene oxide sterilization facilities were closed or closing due to public safety. The chemical used to clean medical products is also dan-gerous in greater concentration to people in surrounding areas and was found to be present at higher levels around the facili-ties, requiring their closure under Environ-mental Protection Agency regulations. (Also see "Sterilization Facility Shutdowns Could Spell Medical Device Shortage; FDA Urges Firms To Assess 'Downstream Im-pacts'" - Medtech Insight, 26 Mar, 2019.)

Now the FDA says its worries have been realized with a temporary shortage of Smiths Medical’s Bivona tracheostomy tubes used to perform tracheotomies on children in hospitals and at home . The devices were being sterilized at Sterigen-ics’ Willowbrook facility in Illinois until it was closed in February.

“Despite best efforts to minimize the im-pact of the closures wherever possible, we have identified a medical device that is now in temporary shortage,” said Jeffrey Shuren, director of the FDA's Center for Devices and Radiological Health. He says the agency is "working closely with the company to quickly resolve their sterilization challenges and bring these critical devices to the pa-tients who need them as quickly as possi-ble, which we anticipate will be made avail-able again beginning the week of April 22.”

While the Bivona tubes can be used on adults and children, the FDA says the shortage is more likely to affect children because they have fewer alternatives to the tube. The device is made from a

flexible silicone that makes it easier to use on children, and while the agency has cleared other silicone tracheostomy tubes for the pediatric population, it says there may not be enough alternative products to cover the shortage.

“We recognize the challenges this shortage imposes for these pediatric pa-tients who need access to new tubes now, and are working to limit the impact to pa-tients as much as possible by helping the company quickly move their sterilization to another facility,” Shuren added.

So far FDA has not heard from any pa-tients or providers that they are out of the tubes. However, the agency says patients and caregivers should contact Smiths Medical directly if they are concerned they may run out of the Bivona tubes to find al-ternatives. It also notes that patients may r

euse their tubes after proper cleaning, but there may be situations where the tube is damaged or leaking, in which case they should talk with their health-care provider about using other FDA-cleared products.

Smiths Medical is still manufacturing the Bivona tubes per its normal schedule and has already begun using an alternative ster-ilization facility. The company estimates it has about 28,000 new tracheostomy tubes ready to be sterilized and is working with the FDA to expedite the process while still meeting the agency's safety standards.

The FDA also says companies that are concerned that they too may face a de-vice shortage because of the sterilization facility closings should contact the agen-cy at [email protected].

Published online 4/15/19

“I want to assure you that the FDA is working closely with the company to quickly resolve their sterilization

challenges and bring these critical devices to the patients who need them as quickly as possible."

– Jeffrey Shuren




All 'Bye' Itself: Alcon Spins Out From Novartis In $25Bn Stock ListingCATHERINE LONGWORTH [email protected]

N ovartis has completed the spin-off of eye-care devices business Alcon in Switzerland's biggest

stock deal in a decade. Alcon officially listed on the SIX Swiss Stock Exchange April 9, with a market capitalization of over $25bn.

The Geneva-based company is the larg-est ophthalmic device maker in the world, with complementary businesses in surgi-cal and vision care, and a global presence in 74 countries. The listing, split across SIX and the NYSE, is expected to be one of Eu-rope’s largest in the coming year.

Alcon said, as a standalone company, it can put greater focus on pursuing its own growth strategy. The company plans to develop a distinct investment identity with a more efficient capital structure, en-abling expansion into new markets and

the development of new business models. In June 2018, Novartis announced its

intention to seek shareholder approval for the spin-out of Alcon into a separate-ly-traded company. Under the terms of the separation, Novartis shareholders and ADR (American Depositary Receipt) holders will receive one Alcon share for every five Novartis shares or ADRs held at the close of business on April 1, 2019, the record date for the distribution. Novartis will retain its ophthalmology pharmaceu-ticals business, and its presbyopia, dry eye and genetic diseases pipeline, which made sales of $4.6bn in 2018

"Demand for eye care is growing ex-ponentially as our population ages and people spend more time in front of screens and mobile devices," Alcon CEO David Endicott said in a statement. "This

listing marks a new chapter in the life of our company," he said, adding that Alcon is committed to addressing the growing consumer need for improved vision and quality eye care all around the world.

Eye care is an approximately $23bn market, growing at roughly 4% annually. In 2018, Alcon had sales of $7.1bn, includ-ing $4bn from it surgical division, up 7% from the prior year; and $3.1bn from vi-sion care, up 3%.


Brexit Delay Gives EU27 Yet More Time To Grow Number Of EU-Compliant DevicesAMANDA MAXWELL [email protected]

T he European Commission says that no “EU-level contingency ac-tion" has been identified as neces-

sary for medical devices in the event of a no-deal Brexit.

It made its comments in an April 10 document, issued just two days ahead of the European Council agreeing to grant the UK a new delay in Brexit lasting until Oct. 31, 2019.

The statement comes in the light of the Commission's long-term position on Brexit which made clear, among other things, that if the UK dropped out of the EU without a deal, then CE marks issued by UK notified bodies would no longer be accepted on EU territory after the Brexit date. (Also see "Commission Spells Out Non-

Recognition Of UK Organizations In Future EU" - Medtech Insigh, 17 Jan, 2018.)

This looked set to threaten the avail-ability of some much-needed and partic-ularly high-risk devices on the EU market.

The EU position has contrasted starkly with the UK position: the UK would allow medical devices and IVDs certified by EU notified bodies onto the UK market for a “time-limited period” after Brexit.

Although, ironically, the UK would no longer be accepting products CE-marked by its own notified bodies from that date.

NATIONAL DEROGATION IS EU ANSWERThe reason the Commission considers no EU-level action to be necessary is because,

it says, EU member states can use existing national derogations that are outlined in the current medical device directives to al-low UK products onto their markets.



These derogations are referred to in a recently issued Annex to that long-term agreement focusing on medicinal prod-ucts and medical devices – a coordinat-ed approach in case of a withdrawal of the UK from the Union without a deal.

In this document, the Commission states that the derogations may allow member states, in duly justified cases, to authorize UK certificate holders to con-tinue placing their products on the mar-ket in the territory of the member state concerned for a limited time.

So, does this mean that each member state will make its own decisions based around what it considers necessary, re-sulting in a patchwork response to the availability of some devices?

It seems that the Commission is trying to avoid this, since – despite arguing that it there will be “no EU-level contingency action” – the Commission has said it will coordinate a transparent and coherent use of the national derogations by mem-ber states across the EU to avoid any frag-mentation of the Single Market.

But the time needed to agree to a na-tional derogation policy, derogations for individual devices, and then coordi-nation of responses, could still threaten some products reaching EU27 citizens.

MAJORITY OF PRODUCTS WILL BE COMPLIANT The Commission is much more upbeat than the industry has been in terms of the sense of the EU being prepared for Brexit. It believes that use of the deroga-tion will be limited as, in terms of prepa-ration, “the majority of medical prod-ucts concerned by the UK withdrawal should be compliant with EU legislation on the withdrawal date.”

Moreover, it made this statement ful-ly expecting that the withdrawal date could have been March 29 or April 12. So, Medtech Insight notes that there is likely to be even more optimism now that there is longer period for all stakeholders to act.

THOSE NOT READY HAVE THEMSELVES TO BLAMEThe Commission had called on stake-holders to prepare for the eventual-

ity of a no-deal as early as May 2017, when issuing its first notice on medici-nal products, the Commission says in this most recent Annex document (see above).

“Several notices and question-and-answer documents on ... medical de-vices have been issued and regularly updated since. The notices invite rel-evant stakeholders to get prepared for the eventuality of a no-deal with-drawal ... and identify all the required actions,” it says.

Economic operators are responsible for taking the necessary measures to ensure their continued compliance with EU legislation, the Commission points out. It says this includes regard-ing EU-localization requirements for certain functions (e.g. authorized rep-resentatives for medical devices) and activities, as well as “the replacement of UK-competent authorities and UK notified bodies by EU27 authorities and EU27 notified bodies in the ap-proval process for placing products on the EU market.”

WHAT THE COMMISSION IS DOING TO MITIGATE RISK OF SHORTAGESHowever, it is possible that, despite best efforts, some medicinal products and medical devices may not be compliant in time and thus there could be a risk of shortages if economic operators do not act swiftly to remedy the situation, the Commission notes.

The Commission and member states will, therefore, continue to monitor closely the progress of ongoing pre-paredness actions and provide support to affected stakeholders.

In medical devices, the Commission is working closely with the EU27 mem-ber states in the context of the Medical Device Coordination Group (MDCG) and the Competent Authority for Medical Devices (CAMD) network to monitor the progress of certificate transfers and identify critical medical devices that may be at risk of shortages.


Device Tax-Repeal Bill Introduced In House With 227 Co-SponsorsSUE DARCEY [email protected]

D emonstrating that 2019 could be the year that permanent de-vice tax repeal is approved by

both the US House and Senate, Reps. Ron Kind and Jackie Walorski rounded up 227 House supporters for the April 10 intro-duction of H.R. 2207, a bill to permanently abolish the 2.3% medtech tax.

Co-sponsors from each party backing the “Protect Medical Innovation Act” in the House include 180 Republicans and 47 Democrats. Previously, more Republi-cans than Democrats in the chamber have supported device-tax repeal. For example, the last vote on repeal of the tax on July 24, 2018, was approved with the support of 96% of Republicans but only 30% of Democrats. Nonetheless, 227 co-sponsors represents a majority of the House’s 435 members, so that number could clinch ap-proval in the chamber if a simple majority vote is required. (Also see "AdvaMed Pins Hopes For Device Tax Repeal On 10 Senate Democrats, But Could Lose House Support" - Medtech Insight, 13 Mar, 2019.)

Meanwhile, mirror legislation in the Senate, S. 692, was introduced earlier in the year by Sens. Pat Toomey, R-Pa., and Amy Klobuchar, D-Minn., and now has 30 co-sponsors. Prospects for passage in the Senate of a device tax-repeal bill also look good in 2019, providing Senate lead-ers call up the proposed bill for a vote, which has been a problem in the past. (Also see "New Device Tax Repeal Bills Are Coming, With Candidate Klobuchar's Help" - Medtech Insight, 13 Feb, 2019.)

“The medical device tax would limit patient access to live-saving technolo-gies and put countless jobs at risk in in northern Indiana. It’s time to end this job-killing tax once and for all,” said Walorski




in a joint April 10 statement with Kind.“Given that this tax applies to revenues

– not profits – it is extremely punitive to medical innovators,” Kind added.

The excise tax, first implemented in 2013 as a means to provide partial rev-enue support for the Affordable Care Act – or Obamacare – has been suspended since 2016, but will take effect again on

Jan. 1, 2020, if the current industry-backed drive to abolish it is not successful.

The device industry also signaled its strong support for the bill. “MDMA thanks Congressman Kind and Congresswoman Walorski for building a broad bipartisan coalition of 227 original co-sponsors who are committed to repealing the device tax,” Paul LaViolette, executive chair of CardioFo-

cus and Chairman of the Board of Directors for the Medical Device Manufacturers Asso-ciation, said in an April 10 MDMA statement.

“We cannot allow the device tax to di-vert one more dollar away from research and development into the cures and ther-apies of tomorrow,” he added.


The Many Layers Of EOS Imaging – Surgical Planning, Low-Dose Imaging, 3D ServicesMARION WEBB [email protected]

E OS imaging SA, a developer of im-aging medical devices for orthope-dics, hoped to impress orthopedic

surgeons at the American Academy of Orthopedic Surgeons (AAOS) conference in Las Vegas with its latest tool, a web-based 3D surgical planning software for total hip arthroplasty.

Industry veteran, Mike Lobinsky, who be-came EOS' CEO this January offered Medtech Insight a demo of the hipEOS 3.0 surgical planning software. (Also see "Execs On The Move: Coloplast, EOS, Notal Hire CEOs From The Inside " - Medtech Insight, 13 Nov, 2018.)

The US FDA cleared hipEOS 3.0 in April 2018 and it is now being marketed to or-thopedic hospitals, academic centers and private practices in the US. EOS also sells web-based 3D spine and knee- surgery planning software based on its 2D/3D orthopedic imaging system. The US FDA cleared it in 2016.

Lobinsky was named CEO of the Paris, France-based publicly traded company to help expand its presence into the US mar-ket. He said that EOS currently only has a 2% market penetration in the US, which offers the largest growth market oppor-tunity in the next two to three years.

The company's core product, EOS Imag-ing System, cleared for marketing in Eu-rope and the US in 2007, offers low dose, full-body and stereo-radiographic images of a patient in the standing position. Its install base has grown to more than 300

worldwide with roughly 100 in the U.S. Although 2018 revenues for EOS imag-

ing were down this year - €35.3m in 2018 versus €37.1m in 2017, EOS continued to grow the number of systems installed to 61 in 2018 compared to 57 in 2017.

Lobinsky sees opportunities in key mar-kets in Europe, North America and the Asia-Pacific region.

"There are roughly 12,000 accounts that could take an EOS globally," Lobinsky told Medtech Insight. "There is a focus on the U.S. for us, but we will also need to continue to deliver EMEA (Europe, Middle East and Afri-ca) and we all know that APAC (Asia Pacific) is starting to become pretty exciting."

The company doesn't offer revenue guidance, but Lobinsky said he's expect-ing 2019 to be a growth year.

In December 2018, Fosun Pharmaceutical AG, an indirect subsidiary of Fosun Pharma Kite Biotechnology Co. Ltd., fully subscribed to 3.4m new shares for an amount of €15.1m, giving Fosun about 13.2% of EOS's share capital and voting rights.

In Europe, EOS has a direct presence in the United Kingdom where it continued its strategic partnership with medtech gi-ant Stryker Corp. In the first half of 2018, EOS also renewed its partnership with Medtronic PLC to continue co-marketing products in Japan. These agreements fo-

� C O M M E R C I A L �



cus on the EOS Imaging System with the ability to expand into 3D services and EO-Sapps online 3D surgical planning solu-tions for spinal, hip and knee surgery.

Lobinksy said EOS was working with all major joint implant makers on its 3D surgical planning software solutions to ensure that surgeons gain access to their hip implant of choice for the patient.

Lukas Vancura, EOS's advanced ortho-pedic solutions director, explained dur-ing the hipEOS demo that the 3D surgical planning software was designed so that surgeons can access 2D low-dose X-rays in functional standing and seated posi-tions and 3D patient-specific data sets, and use them to create a customized sur-gical plan for each patient.

When surgeons access the web-based solution from a hospital or clinic, they can see a patient's hip range of motion in stand-ing and seated positions with a view that allows them to minimize post-operative complications associated with dislocation or impingement of the prosthetic joint.

“The combination of both acquisitions and 3D models helps you to better un-derstand how a patient's spine condition influences the pelvis orientation and mo-bility, so you can account for that while creating the patient-specific surgical plan,” Vancura said.

For surgeons that already have access to an EOS Imaging System, the images can be fed directly into the surgical plan-ning software program. Surgeons can also send X-rays from their clinic or hos-pital to EOS imaging, whose 3D Services team in Montreal, Canada will then con-vert the images and place them into the surgical planning account.

The big benefit of the surgical planning software is that it allows surgeons to see the exact orientation and position of the implant, and modify it as needed for a specific fit with the goal of increasing pre-cision and improving surgical outcomes.

"We can virtually simulate all of that online and using the patient-specific EOS images and 3D model, which we believe no one else can do based on low dose X-ray," Lobinsky said.

Asked about pricing of the solution, Lo-binsky said it's priced as a subscription or

pay per use basis. About 30% of the cur-rent US installed base is under contract with EOS's 3DServices and now expand-ing to our surgical planning solutions.

"Many existing EOS customers have reached out to determine how they can start using our 3D Services and surgical planning solutions,” he said. “Many have asked, if future generations of our surgi-cal planning solutions will bring more predictive analytics into the offering, which we see as a natural progression."

He also sees an increase in physicians who want to bring EOS into private prac-tice, which can be done with a per-use finance program. "For those facilities that do not traditionally use a capital budget process, this is another way to bring EOS into their center."

LOW-DOSE IMAGING BENEFITSRebecca Whitney, general manager for global spine at Zimmer Biomet Holdings Inc., told Medtech Insight at AAOS that she learned about EOS imaging's technology at the conference and sees benefits for a low-dose imaging system in the standing position, especially when treating sco-liosis and spine deformities in children. However, she said a lot of surgeons rely on MRI or CT scans to make critical deci-sions. (Also see "Zimmer Biomet's ROSA ONE Spine System Wins FDA Nod; Other So-lutions Presented At AAOS 2019" - Medtech Insight, 26 Mar, 2019.)

"The fact that you can do it (imaging) standing up depending on what you're trying to treat is a benefit," Whitney said. "When you lie down, you don't necessar-ily get the same imagery as when you're standing up. If you can't X-ray someone standing up, you don't necessarily un-derstand where the spine segments are pushing on each other." (Also see "Device Week, March 29, 2019 – UK Oxfordshire Wants To Become 'Digital-Health' Hub; Robotics, Trials And Innovation At AAOS" - Medtech Insight, 29 Mar, 2019.)

Craig Barnes, Phoenix Children's Hos-pital director of diagnostic imaging, said he uses EOS imaging predominately to assess scoliosis and bone length assess-ments in children. He does not use EOS's surgical planning software, but the hos-

pital has its own 3D lab to reconstruct 2D images into 3D images.

He agreed with Whitney that the main benefits of the EOS Imaging System it that it offers low-dosage imaging, or about 20% the dose of a conventional X-ray.

"That's a significant reduction in dose and that's one of the drivers to have it at our Children's Hospital," he said.

On the upside, he's also found that EOS' measurement of the tibia and femur, when assessing bone length, tends to be slightly more accurate than using con-ventional X ray. EOS uses an X-ray pencil beam that scans the patient from head to toe within seconds as compared to con-ventional X-ray, which uses a convergent beam that fans out top to bottom, caus-ing intrinsic magnification.

"But from a practical standpoint, it doesn't impact the surgeons," he said.

Another advantage of EOS is that it of-fers Micro Dose exams. Barnes said he uses Micro Dose imaging (one view imag-es vs. two-view images) for follow-up vis-its to keep the radiation dose even lower.

Children are particularly susceptible to the adverse effects of radiation and given the need for frequent imaging to moni-tor a progressive condition like scoliosis, makes EOS a good option.

"It's really about 5%-10% (the dose) of conventional X-ray, so it's a substantial further reduction in dose," he said.

The trade-off is lower image quality with less detail, but the ability to assess the cobb angle of the most severe curve in scoliosis patients isn't inhibited by the lower dose. Meanwhile, the detail for a bony abnormality or soft tissue of the abdomen are more limited with a Micro Dose exam.

Barnes said the EOS machine is best suited for high-volume practices.

"The value of having an EOS machine is having high-volume scoliosis, high volume orthopedic … if you're not doing high vol-ume of that, it may not make sense to get that (EOS imaging) – you may be better off having a machine that can do more things, because you have a more limited ability to do different things on it," he said.





US FTC Approves Fresenius And NxStage MergerCATHERINE LONGWORTH [email protected]

T he US Federal Trade Commission has approved a final order set-tling anti-competitive charges for

Fresenius SE & Co. KGaA's proposed $2bn acquisition of NxStage Medical Inc.

Under the terms of FTC's April 9 ap-proval order, the merged company will sell NxStage’s bloodline tubing-sets busi-ness to B. Braun Melsungen AG. To en-sure the divestiture is successful and to maintain the continuity of supply, FTC is requiring Fresenius and NxStage to sup-ply B. Braun with bloodline tubing sets for a limited time while it establishes its own manufacturing capability. FTC has also agreed to appoint a monitor to ensure that Fresenius and NxStage comply with all of their obligations under the order.

Fresenius agreed in August 2017 to pay $30 per share for NxStage for a total value of around $2bn. The deal price represent-ed a 30% premium over NxStage's previ-

ous closing share price of $23.14 and a five-fold-plus increase on NxStage's 2016 revenue of $366m.

The billion-dollar deal was first inked in 2017 and originally scheduled to close in 2018, but faced a number of delays, in-cluding the recent federal government shutdown.

FTC issued a complaint in February alleg-ing the merger of the two companies could harm the US market for bloodline tubing sets compatible with in-clinic hemodialysis machines that treat chronic renal failure. Fresenius has 59% of market while NxStage has 23%. Nipro Corp. is third with 16%.

While issuing the complaint, the five-member Commission voted three to two to accept the proposed deal on the con-dition the merged company divest the bloodline tubing-set business to B. Braun.

The three commissioners who voted for it acknowledged that the deal will

"vertically integrate" NxStage as the larg-est supplier of in-home hemodialysis ma-chines and Fresenius as one of the two largest providers of in-clinic outpatient dialysis treatments, but they believe the deal with B. Braun will remedy the poten-tial harms of vertical integration in this case. "The transaction would likely in-crease the sale of NxStage’s in-home ma-chines and thereby improve health out-comes by making in-home hemodialysis available to more qualifying [end-stage renal disease] patients," the majority con-cluded in a public statement.

The two commissioners who voted against the merger also published statements.

Rohit Chopra wrote: "After this trans-action, fewer new businesses will find it worthwhile to enter, and they will strug-gle to secure funding. This will slow the development of improved machines that would enhance the lives of patients."

Zimmer Biomet Enters Partnership To Improve Outcomes For Patients With Fragile Hip FracturesMARION WEBB [email protected]

Z immer Biomet Holdings Inc. an-nounced today it joined forces with the European Pathway Associ-

ation (EPA), an international not-for-profit group, made up of academic institutions, clinical/care pathway networks and user groups evaluating and implementing care pathways, to launch a study looking at key aspects of hip fragility in fracture care.

The goal is to better understand the care process and help improve the qual-ity, efficiency, and outcomes of care pathways for patients with fragile hip fractures through Zimmer Biomet's Rapid Recovery program, which is implement-ed in select hospitals.

Under the terms of the partnership, Zim-mer Biomet will fund the study and lever-

age EPA's expertise, Zimmer Biomet said."Fragility fractures are often complex

and challenging to treat, as many of the patients are elderly with a variety of co-morbidities. We are pleased to collabo-rate with EPA on this study to examine all phases of the care journey and identify ways to further optimize outcomes of our Rapid Recovery Program," said Didier Del-tort, president of Zimmer Biomet EMEA.

The research project will focus on collab-orative partnerships with several trauma centers across Europe. (Also see "Market In-tel: Innovation Drives Growth, Draws Younger Patients In Joint Replacement Implants Mar-ket" - Medtech Insight, 21 Sep, 2018.)




Avita’s Recell Heals 98% Of Burns In Pediatric Trial REED MILLER [email protected]

R esults from two studies presented at the American Burn Association meeting on April 8 show the ben-

efits of Avita Medical Ltd.'s Recell system for treating severe skin burns.

The US FDA approved Recell in Sep-tember 2018 for the treatment of acute thermal burns in patients 18 years and older based on two randomized trials that showed Recell can completely close these wounds with substantially less do-nor skin than required with conventional split-thickness autografts. Recell uses a small amount of a patient’s own skin to prepare Spray-On Skin Cells at the point-of-care, and can be applied in combina-tion with meshed autographs.

Jeffrey Carter of the New Orleans Burn Center presented data from 23 pediat-ric patients treated with Recell under FDA-approved compassionate use and continued access programs. Children ac-count for about a third of burn injuries, but the lack of available donor skin is a major obstacle in achieving permanent closure of severe burn wounds in chil-dren and they become more susceptible to infection the longer they stay open, Carter said.

In the trial, a total of 107 burn injuries on 23 children were treated with Spray-On Skin Cells prepared with Recell and applied in combination with widely meshed split-thickness autografts to achieve definitive closure. The skin-cell donor sites were also treated with Spray-On Skin Cells.

Four weeks after treatment, 98% of the wounds were healed. The healing rate was the same for patients who had burns over half their body surface as for patients with smaller burns. Also, 62.5%

of the donor sites were healed within a week of treatment, and 100% of the do-nor sites were completely healed within two weeks of treatment.

The cosmetic outcomes were at least “satisfactory” for most of the burns treat-ed in the trial, and the early healing of donor sites contributed to a decrease in cell-harvest times for patients with lim-ited donor-skin availability, Carter said.

Also at the American Burn Association meeting, one of the co-inventors of Re-cell, Fiona Wood of the Burns Service of Western Australia, presented on her long-term experience treating more than 3,500 patients with Recell, including 700 pedi-atric patients.

The overall results from these patients showed Recell treatment reduced the number of surgical procedures and led to earlier interventions, shorter healing times, and shorter hospital stays. Cumu-lative outcome-index results from these patients showed intervention within one week of injury was associated with sig-

nificantly improved outcomes at three months, which were maintained to at least one-year post-injury.

Avita has received funding and tech-nical support for Recell from the Bio-medical Advanced Research and De-velopment Authority within the US Department of Health and Human Ser-vices, under an ongoing USG Contract. The contract supported two random-ized, controlled pivotal clinical trials, the compassionate use and continued access programs, and a health econom-ic model to show the cost-effectiveness of Recell.

The contract also supports two ran-domized trials in pediatric burn patients. One trial is comparing Recell to standard wound-dressing to treat partial thickness burns in children age 1 to 16. The other trial is comparing Recell to standard dressings in the treatment of the skin-cell donor sites.


Rebecca Kelly Slaughter wrote: "Giv-en the high concentration levels and high barriers to entry in the markets involved in this transaction, I again urge the Com-mission to monitor closely the competitive

conditions in these markets and to con-duct a retrospective review of this merger. We all want to improve patient outcomes; it will be extremely valuable for the Com-mission to later assess the accuracy of cur-

rent predictions to see whether this trans-action in fact has the effects the parties and the majority anticipate."


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SPR's Peripheral Nerve Stimulator Relieves Post-Amputation PainREED MILLER [email protected]

R andomized trial results show SPR Therapeutics LLC’sSprint percutane-

ous peripheral nerve stimula-tor may provide durable and significant pain relief and re-duce disability in patients with chronic neuropathic pain fol-lowing lower-limb amputation.

The Sprint system earned US FDA clearance in 2017 for treat-ment of chronic and acute pain, including post-operative and post-traumatic pain. Sprint deliv-ers stimulation through a percutaneous “fine-wire” coiled lead to reduce lead migration. Previous research showed it has a significantly lower risk of infection than other neurostimulation electrodes. (Also see "Market Intel: Peripheral Nerve Stim Players Edge Out Innovative Paths" - Medtech Insight, 22 Jun, 2018.)

Results of the 28-patient randomized trial, led by Christopher Gilmore of the Center for Clinical Research in Winston-Salem, NC, were published April 5 in Regional Anesthesia & Pain Medi-cine. The investigators expect percutaneous nerve stimulation in this population to modulate the painful signals from the pe-riphery directly and/or by the “gating mechanism” in the spinal cord, and to reverse maladaptive cortical changes triggered by amputation. This is the first randomized, placebo-controlled trial of Sprint for post-amputation pain.

The trial enrolled 28 lower-extremity amputees with post-amputation pain. All patients were implanted with a Sprint device under ultrasound guidance. The patients were random-ized to either receive stimulation or not for four weeks, but the patients and the doctors assessing their outcomes knew if their device had been turned on or off. After the four-week random-ized phase of the trial, the patients who had been assigned to the placebo group crossed-over and all subjects received the nerve stimulation therapy for four additional weeks. Two pa-tients in the treatment group had to be excluded from the ef-ficacy analysis due to eligibility changes.

Assessed with standard-ized pain scores, a significantly greater proportion of subjects in the treatment group showed at least 50% reduction in average post-amputation pain during the four-week randomized phase compared to the placebo group, 58% versus 14%. Early results from patients who have com-pleted the one-year follow-up show that 80% of patients treated

with Sprint report continued relief, with an average pain reduction of 76%. The most common side-effect of the Sprint device was skin irritation or redness at the lead exit site, or related to the use of ad-hesive patches or bandages, but there were no serious side-effects.

The authors suggest that longer studies of this therapy may show ongoing pain relief beyond 12 months.

A significantly greater proportion of the treatment group also reported at least 50% reductions in pain after eight weeks of therapy compared to patients in the placebo group, who had four weeks of no therapy followed by four weeks of peripheral nerve stimulation. The authors suspect the patients in the pla-cebo group did not get as much relief from the therapy as the treatment group over the last four weeks of the trial because their experience during the first four weeks led them to not expect any relief, noting that this so-called “nocebo” effect de-serves more study. They also suspect that mandating that all the leads be replaced at the time of crossover, instead of mak-ing it optional as it was in this study, could have improved the eight-week outcomes in the placebo-group patients.

These trial results “suggest that patients with neuropathic pain following amputation may receive significant benefit from this min-imally invasive, reversible percutaneous [peripheral nerve stimula-tion] therapy without the invasiveness and accompanying compli-cations, costs and risks of a permanently implanted system."


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'Major' Pain For FDA: Under OMB Directive, Congress Will Vote On So-Called 'Major' Rules, Guidance DocsSHAWN M. SCHMITT [email protected]

T he US FDA will soon have to submit new regulations and guidance documents to the Office of Management and Budget so it can decide whether they meet the threshold

of a so-called "major" document that must be reviewed and ap-proved by Congress.

The plan is outlined in an April 11 memo to the heads of US agencies from OMB acting Director Russell Vought, which says rules and guidances must go to OMB's Office of Information and Regulatory Affairs for review beginning on May 11.

Under the 1996 Congressional Review Act, an agency docu-ment is considered to be major if it impacts the US economy to the tune of $100m or more; increases costs for consumers, indus-tries or government agencies; or affects the ability of US compa-nies to compete with foreign ones.

"Agencies should not publish a rule – major or not major – in the Federal Register, on their websites, or in any other public manner before OIRA has made the major determination and the agency has complied with the requirements of the CRA," Vought's memo says.

The move from the OMB should come as no surprise given that it's in line with the Trump administration's goal of deregulation, a pet issue for the president.

Shortly after taking office in January 2017, Trump issued a number of executive orders to promote his agenda, including one that re-quires federal agencies to withdraw two regulations for every new one issued – known as the "2-for-1" order – and another requiring agencies to create Regulatory Reform Task Forces to promote de-regulation. (Also see "Trump's Two-For-One Reg Order Needs Agency In-terpretation, Medtech Reg Experts Say" - Medtech Insight, 30 Jan, 2017.)

In October, the White House announced that the FDA with-drew at least 10 rules in response to the executive orders. (Also see "OMB: US FDA Has Withdrawn At least 10 Regulations In Re-sponse To Trump 2-for-1 Order" - Medtech Insight, 6 Oct, 2017.)

But what makes Vought's memo stand out is its direction to agencies that their guidance documents should be sent to the OIRA for review. If a guidance is deemed to be major by the OIRA, it would then go to Congress for a review and vote. That's a break from traditional practice – Congress typically doesn't involve it-self with approving agency guidance docs.

The Congressional Review Act "applies to more than just notice-and-comment rules; it also encompasses a wide range of other regulatory actions, including inter alia, guidance documents, gen-eral statements of policy, and interpretive rules," the memo says.

This direction from Vought will undoubtedly delight some in the medical device industry who have complained for years that the FDA uses their voluntary guidance documents to actively drive regulatory decisions. (Also see "Is Draft Guidance More Than Meets The Eye? Senators Seek Answers From FDA" - Medtech Insight, 8 May, 2014.)

VOUGHT LAYS DOWN THE PROCESS Because the "OIRA does not consistently receive from agencies the information necessary to determine whether a rule is major," Vought complained in his memo, government agencies must now follow a process when they want to put out regulations or guidance docs.

First, an agency must keep the OIRA abreast of documents in the pipeline. And rules or guidances sent to the OIRA by an agen-cy should include an analysis to help the office better determine if they are major or not.

"This analysis should be appropriate to the type of rule and the degree of uncertainty concerning its impacts," the memo says. "Insufficient or inadequate analysis may delay OIRA's determina-tion and an agency's ability to publish a rule and to make the rule effective."

After a document is branded by the OIRA as major or minor, "agencies may send the CRA report to Congress and the Comp-troller … and may then publish the rule in the Federal Register, and otherwise publicly release the rule," the memo says. "If OIRA designates a rule as major, agencies should delay the effective date of the rule by 60 days from the date of the rule's submis-sion to Congress or the rule is published in the Federal Register, whichever is later."

Vought notes that the OIRA will designate "certain categories of rules as presumptively not major" to give priority to docu-ments that are more likely to be major.

"OIRA will work with senior agency officials to identify categories of rules that are presumptively not major because they are unlikely to result in the impacts described for a major rule," he wrote.





German Industry Is Winning Medtech Aids Quality Battle, If Slowly ASHLEY YEO [email protected]

T he supply of high volumes of lower-quality medtech aids to patients in Germany, via tenders issued by the sickness funds, has long been a bone of contention for both the

local medtech industry and suppliers of higher-quality, higher-price products from outside Germany. The 2007 decision to in-troduce tendering for medtech aids led to price wars in which quality inevitably suffered, according to the industry view.

The years-long wrangle seems to have finally been ended by provisions in the new health-care provision law, Terminservice- und Versorgungsgesetz (TSVG), which came into effect on April 1, 2019. (Also see "New Health Law Should Mean Faster Access To Diagnostics Innovation, Germany’s IVD Industry Says" - Medtech In-sight, 30 Jan, 2019.) The drive for change came out of failure of the existing therapeutic and medtech aids law (HHVG, 2017) to meet the quality-care criteria that the lawmakers intended. This led to the decision to ban tenders. The sickness funds’ use of so-called “open-house contracts,” which were not part of the 2017 law, have also been criticized by the government and industry alike.

But the HHVG has now been amended by the TSVG, and the supply of medtech aids will henceforth take place only on a negotiated-deal basis. The coalition government and opposi-tion parties are in agreement on the need for the action, but the sickness funds umbrella organization, the GKV, has been far from happy, having been in favor of strengthening the provisions sur-round tenders, not banning them entirely. At the other extreme, the home-care quality association (VVHC) has said that tender winners had been effectively “buying” patients.

The recent attention to the misfiring process has brought much-needed transparency to the debate. The ban on tenders is a positive political reaction to the failure of the system, SPD MP Martina Stamm-Fibich told an industry gathering in Berlin on April 11. Quality has to be established first and foremost, “then we shall see how the payments develop,” the MP, who is also the SPD party’s rapporteur for medtech, said.

But some sickness funds are not reacting well to HHVG reform provision, and are still favoring price over quality-care delivery, she

claimed. The law is only days old, but she promised to monitor how it is being observed by the sickness funds. It is also important that the medtech aids catalogue is updated on a regular basis, she added, to re-flect the change in products available for prescribing.

BVMed’s incom-ing chief execu-tive Dr. Marc-Pierre Möll went further, demand-ing federally binding requirements to monitor sickness funds’ deals. (Also see "Medtech Under Pressure? German Industry Urges Realistic Patient Safety And Innovation Balance " - Medtech Insight, 25 Jan, 2019.)

This would be a step toward guaranteeing that only high-quality, highly-regulated, patient-appropriate and durable prod-ucts reach the market. It would effectively end a form of unfair competition.

WOUND CARE IN FOCUSA proposed change to how wound-care bandaging is defined is included in the new draft GSAV (pharmaceutical care safety law). In-dustry is concerned that pharmacological, immunological or meta-bolic wound-care dressings will no longer be defined as bandag-ing, according to the draft law, which ostensibly targets dressings to treat wounds infected with multi-resistant bacteria.

The change would mean some 3,000 of the currently 8,000 types of bandaging available in Germany no longer being reim-bursed by the sickness funds. The upper house is opposed to the change, as is industry, which says that options for care would be reduced, with obvious knock-on effects for patients.


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If You Build It, They Will Come: FDAer Says Pre-Cert Program Getting Global Attention, AI Paper Just the StartFERDOUS AL-FARUQUE [email protected]

R egulators around the world are watching what the US FDA is doing to build a new pathway for software as a medical device (SaMD), according to Bakul Patel, associ-ate director of digital health at the agency's Center for Devices and Radiological

Health. He also says the recent discussion paper on artificial intelligence is not the be all and end all before the agency develops a draft guidance on the topic.

During a panel discussion at the 2019 World Medical Innovation Forum in Boston, Pa-tel noted he and other international regulators have been working for the past five years to develop a broad framework and definition for SaMD.

“Can this approach be applicable in other countries? I believe it can be, but we have to prove it first here before we sit down and figure out what [international] harmonization is going to look like,” he said. “I’m actually hopeful with the results of this program – if we were to try it out and be successful, others will follow. I say that because I get phone calls and emails from my international colleagues.”

After his talk, Patel spoke with Medtech Insight to elaborate on his points.

TURNING HEADS Patel has been talking to regulators from Canada, Singapore and Japan that are inter-ested in the agency’s pre-cert pilot program. He noted that other countries such as Brazil are using frameworks already built into the International Medical Device Regulators Fo-rum (IMDRF) for direction on digital health, and some regulators have directly broached the topic with companies enrolled in the pilot.

"There are a lot of people who have been observing what we're doing,” Patel said. “[Oth-er regulators] may be still trying to figure out how to translate it into their laws or legal structure, but everybody is very interested. At least that's what's the impression I get."

"Everybody's curious because we're moving so quickly,” he added, noting that regula-tors in other jurisdictions seem to be interested in the FDA’s work because they, too, are seeing an explosion of SaMDs in their own countries.

Patel first widely proposed the idea of a pre-cert program at the Digital Medtech Con-ference in San Francisco in 2017. Since then the idea has gathered significant momentum

“I’m actually hopeful with the results of

this program – if we were to try it out and be successful, others will follow. I say that because I get phone calls and emails from

my international colleagues.” – Bakul Patel

Life science attorney Bethany Hills and the FDA's Bakul Patel at the 2019 World Medical Innovation Forum in Boston

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and feedback from industry, and has resulted in the pilot program to evaluate the new pathway, which includes participants such as Apple Inc., Verily Life Sciences LLC, Roche and Tidepool. (Also see "Software Fast Track? US FDA Asks Devel-opers To Envision 'Precheck' Program" - Medtech Insight, 9 Mar, 2017.) and (Also see "'Excellence' In Health-Software Design: US FDA Taps Nine Firms

To Figure Out What That Means" - Medtech Insight, 26 Sep, 2017.)Since the announcement, the FDA has also released a number

of evolving documents to gauge industry feedback including a working model, a test plan and a regulatory framework. (Also see "2019 Will Be Testing Period For US FDA's Novel Pre-Cert Paradigm For Digital Health " - Medtech Insight, 8 Jan, 2019.)

The program has been running for well over a year, but Patel and his team are just getting ready to start their appraisals of the pilot participants. He says they are in the process of developing a plan to start doing those appraisals and learn from any de novos that result from the pilot.

The appraisals will include reviewing the de novo submissions from the pilot programs, and the agency hopes to share its find-ings along the way.

Patel says he hopes to release an update on the pilot around midyear but couldn’t be more specific.

“We don’t want to do it bounded by a time because we want enough information to share so that we can actually say, 'This is what we learned,'” he said. “So, by doing and learning where we tweak and don’t tweak, what worked [and] what didn’t work, is really what we want to do to test the midyear update. 'Midyear' could be June, July.”

KEEP TALKINGThe directive Patel issued to his pre-cert team is to ensure they have enough substance in their appraisals that they can share publicly, and that will help stakeholders believe that the agen-cy is being transparent. He says the agency has tried to keep stakeholders as informed as possible over the past few years to create a feedback loop that can help the agency develop the new pathway.

“Look at what we have so far and don’t wait for us to tell you what we’ve come up with.” – Bakul Patel

“My hope is [by midyear] we have at least a few appraisals un-der our belt [and] at least a couple of submissions that we can do,” Patel said. “I don’t know how many of them we can do, but that’s the goal.”

So far, he says industry has been very good at offering feed-back, and he asks stakeholders continue to be engaged.

The FDA has already provided an ample amount of details in their working model, according to Patel, and he wants compa-nies to come back to the agency with comments on how the model as it’s laid out impacts their work. During the panel he noted that the pilot program includes only nine participants – which isn’t a very large sample to observe – and would like to see more engagement from industry.

Patel encourages companies to put themselves in the FDA’s shoes to gain a better understanding of the kinds of answers and information it needs to ensure there’s enough confidence to get their products to market.

DRAFTING THE AI FUTURE Last week, the FDA released a discussion paper on artificial intel-ligence that is meant spur discussion in the health-care industry and help the agency in its efforts to develop a draft guidance on the topic. The FDA is hoping to get feedback on the paper in June. (Also see "Rise Of The Machines: FDA Artificial Intelligence Guidance Is Coming" - Medtech Insight, 2 Apr, 2019.)

During the panel discussion, however, Patel noted there will like-ly have to be a number of things that need to happen between the time the FDA reads all the comments from the discussion paper and when it is able to issue a draft guidance on the topic.

He clarified those comments to Medtech Insight: “The entire dis-cussion paper isn’t just going to get turned into a draft guidance. That would be a dream. But I also see a role for industry to play from a standards organization perspective. Roles for science to evolve.”

For example, he says industry may need to come up with stan-dards on how data partitioning is meant to be addressed with AI-based products, noting that such issues are more in the science realm rather than the regulatory arena.

Asked if the FDA may consider holding a workshop after the discussion paper deadline to bring stakeholders together and discuss key issues, Patel said holding workshops are a “heavy lift” for an agency with limited resources. Instead, he encourages the stakeholders themselves to spur discussions amongst them-selves, to then share answers to with the FDA.

“I think there’s so many things the community can start help-ing with as well,” Patel said. “Having a workshop on what is good practices for machine learning would be a low-hanging fruit.”

He says trying to get consensus inside the industry would go a long way, and even if the solutions aren’t perfect they at least would get conversations started, which is ultimately the main goal of the discussion paper.

From the FDA’s perspective, Patel says it's trying to be “responsible” as a regulator in a “fast-moving, emerging, yet very promising field.”

The big question is, “How do we prepare ourselves for the dig-ital-health future?” he asks. “If we prepare ourselves, we can reap the benefits.”


“Look at what we have so far and don’t wait for us to tell you what

we’ve come up with." – Bakul Patel

LISTENHear Bakul Patel talk about the FDA's pre-cert program

and its plans for AI at https://bit.ly/2Vc4zfu.

https://bit.ly/2Vc4zfu



The Legal Gap Allowing Competitors To Exploit EudamedAMANDA MAXWELL [email protected]

T he EU's Eudamed medical device database will be the receptacle for a welter of detailed informa-

tion about medical technology, including some information that will be freely ac-cessible and of high value to competitors.

But there is currently a lack of clarity over the precise nature of the informa-tion that will be available to the general public on Eudamed, as well as a lack of legislation around its use, Vincenzo Sal-vatore, BonelliErede's health-care and life

sciences focus team leader, explained to Medtech Insight.

Salvatore, also former head of legal services at the EMA, believes that the medtech sector is likely to want to push for rules around the access and use of in-formation made accessible via Eudamed.

The situation for devices is in contrast, he explained, with that for the pharma industry, where there is a detailed and up-to-date EudraVigilance access policy that defines the overall principles for pro-

viding access to Individual Case Safety Reports (ICSR), which are held in Eudra-Vigilance. These principles are in line with the EU legal framework, and take into ac-count the interest in the data, the use of which may vary between stakeholders.

But there are no such provisions for the medtech sector. Medtech Insight invited Salvatore to further explain a situation that potentially could threaten the sur-vival of some device companies, and par-ticularly SMEs.

Medtech Insight: Do the EU Medical Device and IVD Regulations impose on manufacturers the sharing of an appropriate amount of information with the public, or too much, or too little, in terms of the potential public health interests of sharing information?

Vicenzo Salvatore: It represents a big step forward toward increased transparency. I think the amount of information that will be made accessible is fair, and it may also be broad-ened in scope. The real issue is rather how to protect it from unfair or inappropriate use by third parties.

What data will be available in the context of the updated Eu-damed medical device database under the new Medical Device and IVD Regulations that will have further potential value and use, in your view, and why? And how could this data be used?

Salvatore: The Eudamed database will contain key device in-formation submitted to Eudamed, which will be searchable, as the concerned device will have a Unique Device Identifier (UDI). The technical information will be protected by IP rights (ie, patents), but competitors may make use of safety-related information submitted to Eudamed, for instance, to avoid the replication of trials that proved to be unsuccessful.

Are there any restrictions around the potential further utiliza-tion of and profiting from this data?

Salvatore: This is not the case to the best of my knowledge, and that’s the issue: there is a legal gap that needs to be filled. At least, that is my personal view, based on what has been done for medicinal products. I am pretty sure the medical device industry would welcome – and would likely push for – the adoption of a specific set of rules governing not only access to, but also the potential further use of Eudamed data.

Is there any data protection in the medical devices area and how does this compare with pharma?

Salvatore: There is no regulatory data protection nor market exclusivity in the medical devices area, as the marketing of a medical device is not subject to the granting of a marketing au-thorization nor to a preliminary assessment of technical dossier by a regulatory authority. Marketing authorization holders of medicinal products are granted eight years of regulatory data protection, plus two years of market exclusivity and an addi-tional one year in case of a line extension (the so-called 8+2+1 rule) as a consequence of the granting of the marketing au-thorization. As medical devices are not subject to a marketing authorization, they do not benefit from similar regulatory data protection nor market exclusivity. The latter implies that if effi-cacy or safety data concerning medical devices are shared, they can be used by competitors without any restrictions.

The ICIJ's Implant Files journalists have been lobbying for as much information as possible to be made available on implants through Eudamed to the public. While there are already some rules in the regulations about the type of information that will be made public, the European Commission has yet to decide which information, exactly, it is in the public interest to share. Can you elucidate on that?

Salvatore: Eudamed will become accessible not only to pub-lic authorities (ie, EU member states and the Commission, as it is now the case), but also to all categories of stakeholders. Manufacturers, importers, distributors and the public will have access to a selected set of information. The kind of information that shall be included in Eudamed is listed under Article 33(2) of the MDR (Regulation (EU) 2017/745). The most critical sections of Eudamed in terms of potential anti-competitive reuse of rel-




evant information would be those listed under letter (e), (f ) and (g). These entail, inter alia: the exchange of information relating to clinical investigations; the reporting of serious adverse events and device deficiencies; and the reporting by manufacturers of any statistically significant increase in the frequency or severity of incidents and information in relation to devices presenting an unacceptable risk to health and safety. It still not clear exactly which and to what extent of these information types will be ac-cessible to notified bodies, economic operators, sponsors and the public, respectively. But, as noted above, different scenarios and their impact might include: market malfunction of current devices; information concerning serious incidents; and field safety notices. Article 92(3) mandates the Commission to ensure that health-care professionals and the public have appropriate levels of access to the relevant information, whilst Article 100(3) of the MDR states that information exchanged between mem-ber states shall not be made public if doing so might impair market surveillance activities and cooperation between mem-ber states. This implies that, if this is not the case, the relevant information shall be made publicly available.

What interests must be balanced in terms of considering how much data should be made available and how much can be repurposed?

Salvatore: The right balance between the demand for in-creased transparency and the need to protect commercial

confidential information will have to be sought. One could also foresee a general ban placed on competitors reusing rel-evant data and information retrieved from Eudamed for com-mercial purposes for a certain period. This could be addressed by an implementing regulation adopted by the European Commission for the proper and correct implementation of Articles 33(2), and more specifically of Articles 73, 92 and 100. The adoption of the concerned provisions may be supported by medical device industry associations and possibly be solic-ited by member states' competent authorities.

Among your clients, what is the reaction to potential data use resulting from Eudamed?

Salvatore: I have not registered any official reaction from my clients so far on the matter at hand. Nonetheless, they are mainly big manufacturers, whilst in my view concerns may more likely be raised by small and medium-sized enterprises. SMEs may find themselves in a weaker position to challenge anti-competitive practices if competitors have access to their data, for reuse, through Eudamed. This is understandably due not only to the different size of the players, but also to the deterrent of having to bear the costs, and given both the un-certain outcome of the proceedings and the time needed to analyze anti-competitive behaviors.


Device Firms Would Have To Report Value Of Device Samples For Patient Use Under STAR ActSUE DARCEY [email protected]

D evice manufacturers could be obligated to report the value of any samples of medtech products they give to physicians for patient use – even some used for educational purposes

– under a proposed amendment to the Physician Payment Sunshine Act passed by the House Ways and Means Committee on April 9.

H.R. 2113, the “Prescription Drug Sunshine, Transparency, Ac-countability and Reporting Act,” or STAR Act, introduced in the House by Ways and Means Committee Chairman Richard Neal, D-Mass., and ranking member Kevin Brady, R-Texas, was approved by the committee on April 9.

A provision of the bill requires manufacturers of “drugs, devic-es, biologicals and medical suppliers” to report to the US Centers for Medicare and Medicaid Services (CMS) the value of any prod-uct sample they give to physicians, so that any member of the public can later learn the value of these “free samples” that the physician might later pass on to a patient, or use to demonstrate a surgical procedure to a patient.



The dollar value of the free samples would have to be re-ported by the physician, or a teaching hospital, to CMS for re-porting purposes on its “Open Payments” database. However, language in the new bill appears to run afoul of a provision in the original Sunshine Act regarding “educational materials that directly benefit patients,” which now are exempted from being reported to CMS under the law, so the language in the bill would have to be tinkered with to make clear that device demonstration models used for patient education could con-tinue to be exempt from reporting, lawmakers agreed. The is-sue of which samples might be reportable to Open Payments and which would be exempted as educational materials was first brought up by manufacturers in 2013, the first year the Sunshine Act was implemented. (Also see "Companies Dig Into Sunshine Rule Details In Preparation For Aug. 1 Go-Live Date" - Medtech Insight, 11 Feb, 2013.)

“We aren’t prohibiting free samples, but we are shining a light on little-known parts of the drug distribution system. Notably, drug manufacturers spend significantly more on free samples than they do on direct-to-consumer advertising,” said bill author Neal in his opening statement at the April 9 markup session de-scribing the STAR Act’s intent. He emphasized the bill applies to samples from device and medical supply firms, as well as those from drug companies.

“All of these manufacturers provide free samples, and all of these products are related to cost increases, exponentially. Further, the device space can be even more opaque than is necessary, for a well-functioning marketplace,” the congressman added.

SOME EDUCATIONAL DEVICES MAY BE REPORTABLEAt the markup session, Rep. Jackie Walorski, R-Ind., asked a se-ries of clarifying questions of House Committee staffer Amy Hall, on whether sample devices used to educate patients also would have to be reported under H.R. 2113.

“The bill before us today makes a change to reporting of sam-ples for ‘patient use,’” Walorski said. “For instance, a physician could directly educate patients on how to use their glucose me-ters, or a syringe for the first time – that could include a demon-stration with a device sample in the doctor’s office.

“A physician could also show a senior who’s about to undergo a hip replacement what that device looks like, prior to inserting that implant into her. Ultimately, a patient’s success with any de-vice is dependent on knowing how to use it. Patient education is critical,” she said.

Walorski asked Hall if the bill would trigger a new obligation for device firms to report samples of all device products given free to patients, except for those strictly used for educational purposes.

“No,” Hall answered. “We agree that such an item, which is given to physicians for the purposes of educating patients, falls within the educational materials exclusion within the CMS rule.”

“So there [would be] a new obligation to report such products if they meet any other exclusions that fall under the Sunshine Act?” Walorski said, pressing the staffer.

“Correct,” Hall said.“This is an issue that I want to make sure is very clear. Could you

please work to incorporate the stakeholder feedback on this, into the bill’s language?” Walorski asked Neal, who agreed.


“All these manufacturers [including device firms] provide free samples,

and all are related to cost increases, exponentially.” – Rep. Richard Neal

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Industry Gets Extra Month For 510(k) Revamp CommentsELIZABETH ORR [email protected]

S takeholders have an extra 30 days to respond to a US FDA proposal to publicize devices that used older predicates, the agency announced on April 11.

The FDA wants to put a list online of devices using predicates more than a decade old as a way to discourage the use of older predicates, which may rely on outdated science. Manufacturers and other stakeholders have argued that the 10-year standard is arbi-trary and may not indicate additional risk for some device types.

The FDA issued a notice seeking comment on the proposal on Jan. 22. (Also see "Standards, Not Predicates Emphasized In Finalized Alternative 510(k) Pathway " - Medtech Insight, 22 Jan, 2019.)

The 30-day extension allows comments to be collected through May 22, as opposed to the previous deadline of April 22. The statement announcing the change asked for additional comments on whether and how FDA should publicize informa-tion related to older predicates.

Comments can be submitted to docket No. FDA-2018-N-4751 via regulations.gov.

The proposal’s docket folder shows that at least 29 comments have already been submitted. Some comments argue the 510(k) pathway needs to be tossed out or rethought entirely due to alleged risks to patients posed by devices such as pelvic mesh, metal-on-metal hips and surgical robot technology.

“The FDA needs to shut down the entire 510(k) process, or get a

handle on the biggest violators and culprits who are abusing the system for financial gain only,” one anonymous comment from an artificial hip patient reads. “After three revisions, two disloca-tions and one ‘infection,’ I am pretty certain that something went way south here.”

But other comments questioned FDA’s reasoning for the 10-year window. A comment from Hyman, Phelps & McNamara attorney Jeffrey Shapiro pointed out that many devices have multiple pred-icates, which may include both more recent and older devices. “If a 510(k) submission reaches back to include a predicate that is older than 10 years, while at the same time citing a predicate that is un-der 10 years, can one say a priori that insufficient innovation has taken place? It would seem that one would need to examine the clearances in detail to reach an informed judgment,” he wrote.

Shapiro further noted that not all device types change rapidly, and that for some devices an older predicate might be appropri-ate. He concluded that, while not harmful, FDA’s proposal is likely unnecessary.

“The 510(k) system is working quite well in fostering rapid itera-tive improvement of medical devices. The use of older predicates is not central to the 510(k) system, but it is appropriate in some cases. It does not deserve special opprobrium,” he wrote.


BD Has Paid Enough In False-Ad Suit, Appeals Court SaysELIZABETH ORR [email protected]

D evice-maker Becton Dickinson & Co. (BD) doesn’t have to pay anything more to resolve a false-advertising case brought by rival sharps manufacturer Retractable Tech-

nologies Inc., the 5th Circuit Court of Appeals ruled on March 26.The split decision is the latest move in a series of lawsuits dat-

ing back to 2001, when RTI sued BD for patent infringement. BD settled that case, agreeing to pay $100m in 2004. But in 2007, RTI filed a subsequent complaint alleging that BD had committed further patent violations and anti-trust activities.

The most recent ruling is the result of a decade-plus of legal wrangling on the antitrust allegations. An Eastern Texas jury found that BD had made inaccurate claims about some safety syringes in 2013, awarding RTI $113.5m in compensation for the violation of false-advertising law. The judge then tripled that amount to $352m.

But BD appealed that award to the US 5th Circuit Court of Ap-peals, which overturned the antitrust ruling but upheld the false-advertising claim. The 5th Circuit sent the case back to a lower court to determine what BD owed to RTI. And in August 2017, the Eastern Texas court determined that BD had already paid

enough as a result of other rulings and that no further penalties were necessary.

BD then appealed that verdict to the 5th Circuit, which upheld the lower court’s ruling in a 2-1 ruling.

The majority held that RTI had not established that it lost sales as a result of the false advertising, and further said that BD had already made restitution by informing its customers of the misstatements.

“Our caselaw ensures that where a false-advertiser succeeds in di-verting sales or otherwise demonstrably harms another party’s con-sumer goodwill, the district court will account for this in assessing the equities of disgorgement,” Judge Patrick Higgenbotham wrote. “While RTI may have failed to demonstrate such harm here, future would-be false-advertisers would do well to heed that warning.”

But in his dissent, Judge James Graves said the lower court had erred in how it assessed RTI’s damages.

RTI said it was conferring with its lawyers over possible future action.




EU MDR: Any Surprises In The European Commission Notified Body Database?AMANDA MAXWELL [email protected]

I t has been almost four months now since news of the appointment of BSI UK as the first notified body under the Medi-

cal Device Regulation (MDR) appeared in the European Commission’s medical device database. But the future of its certificates is under threat because of Brexit (see below).

With just over 13 months to go until the full implementation of the MDR on May 26, 2020, who else is now on that list? Have any EU 27 notified bodies been designated?

It may come as a surprise to the sector to learn that no more medical device no-tified bodies have been appointed under the MDR since January.

Nor have there been any IVD notified body appointments under the IVD Regu-lation – which comes into force fully on May 26, 2022.

This is even though we are now nearly two-thirds through the transition pe-riod, which began on May 26, 2017. Too many structures and documents remain unavailable or are not fully ready, and the sector has every reason to remain very concerned. In addition, there is the specter of potential bottlenecks at noti-fied bodies because of the huge demand there will be for conformity assessment against the new regulations. This will be

exacerbated by the non-availability of designated notified bodies amid increas-ingly tight timelines.

BSI UK CERTIFICATES TO BE CRUSHED BY BREXIT?What's more, BSI could become a UK-only no-tified body any day now if there is a no-deal Brexit, and, at that point, medical devices CE-marked in the UK will no longer have free ac-cess to the EU market. In the eyes of the EU, the value of these certificates to access the EU27 will become null and void, and they will not be recognized on the UK market. (Also see "Surprise As UK Notified Bodies Lose Major

Part Of Their UK Role In Devices From March 29" - Medtech Insight, 11 Feb, 2019.)

While the long-touted March 29, 2019, date for Brexit has passed, almost every day seems to be critical in terms of de-cisions over whether the UK will either leave the EU without a deal, or with an-other deadline extension, giving it more time to get its act together.

Will another non-UK notified body be appointed under the MDR before BSI UK loses its EU status? This is long overdue and much needed. CE marks issued by notified bodies in the EU27 will continue to be recognized in the UK in the event of a no-deal Brexit for a “time-limited pe-riod,” according to the UK government.

BSI has been taking steps to support its clients by creating BSI NL, a sister branch established in the Netherlands, and has a simple process for transferring certifi-cates from BSI UK to BSI NL. (Also see "BSI Touts 'Very Short' Waiting Times For Migrat-ing Certificates From UK To Netherlands" - Medtech Insight, 5 Feb, 2019.)

But while BSI NL is designated under all three medical device directives, there is no news yet of it being designated under the MDR.

The latest update on the European Commission's website on the state of play of joint assessments of notified bodies in the medical devices sector was issued in mid-February.

As of that date, 33 applications had been received by the European Commis-sion from notified bodies seeking des-ignation under the MDR and nine under the IVDR. Mostly, the notified bodies are seeking designation for the entirety of MDR and IVDR codes.

These designations are moving along in a staggered way, and it looks as if be-tween one and three further notified body appointments under the MDR, and even possibly under the IVDR, should be imminent. For further news on develop-ments related to appointments under the IVDR, see Medtech Insight’s mid-January update. (Also see "IVDR Notified Body Num-bers – Has Enough Progress Been Made?" - Medtech Insight, 18 Jan, 2019.)


Notified Bodies Under The DirectivesThere are 57 notified bodies designated under the current Medical Devices Directive, 13 under the Active Implantable Medical Devices Directive, and 22 under the IVD Directive as of April 9, 2019.



� C O V E R S T O R Y �

"I really wanted to put this [issue] in front of FDA, in front of industry, in front of MDIC, [so we could] address this very, very costly issue that we have in our com-panies called 'CAPA,'" she said.

"I wanted to start this team #make-CAPAcool because … industry and FDA have created a monster. We have created a monster called 'CAPA,' and we have to figure out a way to reduce that monster, to get rid of that monster," said Pendy, whose comments came at a recent Case for Quality open forum.

#makeCAPAcool is one of four initia-tives currently being worked on under a Case for Quality 2020 Strategic Plan. (Also see "With New Initiatives, Case For Quality Embarks On Mission To Create 'Safe Space,' Engage CEOs, #makeCAPAcool" - Medtech Insight, 29 Jun, 2018.)

NOT YOUR GRANDFATHER'S CAPA Pendy, who is the sponsor for #makeCA-PAcool, drafted her colleague Kathryn Merrill into the 30-person-strong group as project chair. Merrill is Medtronic's se-nior lean sigma manager.

"We obviously have a really challeng-ing goal: to reduce patient risk, improve CAPA effectiveness and reduce the bur-den it requires to actually make quality improvements," Merrill said at the Case for Quality forum.

Today, industry uses "a CAPA process that, regardless of risk, you have the same amount of effort that's required," she said. "What happens is, you have fewer problems solved, and you have a reduced improvement over time.

"When everything's important, noth-ing is," Merrill added. When that happens, "you don't really know where to focus your resources or how to align everyone."

But #makeCAPAcool acknowledges that not all problems are created equal.

"There are obviously those [problems] that you can just find and fix, so internally within your organization you could be em-powered to fix it right there when it hap-pens," Merrill said. And "some things are really obvious. You look at them and say, 'It's a no-brainer. This is what we need to do,' and no root cause analysis is needed."

Under a new CAPA framework devel-oped by #makeCAPAcool and piloted by a handful of device-makers, the key ques-tion firms should now ask themselves when deciding whether to elevate a problem to a CAPA is: "Will this potentially impact patients or users?"

"If it's potentially patient- or user-im-pacting – provided you have not been preapproved for the complaint rate – that's going to be a CAPA for medium or high risk," Merrill said.

And filtered into a separate "internal signals" bucket are issues that don't nec-essarily directly impact patients or users, including process nonconformances, au-dit findings, out-of-tolerance specs – "any-thing that typically would be a quality sig-nal today that you would trend within the CAPA system would go there," she said.

Such problems are "going to come in as events or trends, and they would go into a predefined continuous improvement loop that allows the organization to say, 'Hey, we're going to try to address this ourselves within our systems that we've designed.' And if that does not address it, you [can] potentially escalate [to a CAPA] if it's patient- or user-impacting."

The CAPA framework begets a process that filters through all of a company's problems and allows the firm to put its resources and effort into issues that will have the biggest impact. It also leverages a manufacturer's quality system.

Under the framework, "a predefined continuous improvement loop will be embedded within your already existing quality management system, like [in] your nonconformance process or your audit process," Merrill said.

'PURE PREVENTATIVE ACTION' Another key piece of #makeCAPAcool's framework is a process enhancement tool the group calls "Pure Preventative Action."

"That means [the problem has] never occurred before," Merrill said. "If you have ever tried to do a preventative CAPA, you know that you can't really assess the risk, and you can't really do an effectiveness check because it's very complicated – so firms struggle with that."

With Pure Preventative Action, "we're taking that action that never happened be-fore, and we're saying, 'Organizations, you are free to literally do that as part of a qual-ity improvement project,'" she said. "There's a lot of drive to do that. Especially think about design, or when you're building a piece of equipment or a process, or you go out there and proactively look at your pro-cess and say, 'If I want to prevent a CAPA in the future, how would I do that?' Well, now you can do that, defined as a Pure Preventa-tive Action, without being nervous the FDA is going to come in and say, 'Well, you didn't put that in the CAPA process.'"

Merrill noted that firms would docu-ment Pure Preventative Actions in their quality system.

"When you make a change, you still have to go through the effectiveness checks and the verification as required, but you wouldn't have to go through the CAPA process to do that," she said. "The more you do Pure Preventative Action, the less potential there will be for a CAPA."

NEXT STEPS #makeCAPAcool finalized its CAPA frame-work at a March 27-28 meeting in Chica-go. Over the next few months, the group will draft a white paper on the topic and best practices for industry.

The group will also recommend chang-es to the FDA's Quality System Inspection Technique. QSIT is designed to make sure that agency investigators look at the most important compliance issues and ask per-tinent questions linked to four major qual-ity system subsystems, including CAPA.

The voluntary framework will be rolled out to manufacturers later this year.


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